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How to Use Sector ETFs to Trade a “Story” with Strong Technicals

Adding sector ETFs with the right “story” and the right technicals can help boost your portfolio returns, as long as you trade them properly.

In today’s video, Cabot ETF Strategist’s Chief Analyst Kate Stalter discusses using smaller sector ETFs to take advantage of compelling macroeconomic conditions and “stories” to execute short- or intermediate-term trades during periods of high technical strength. She highlights the importance of treating the potentially volatile sector ETFs as trades, not long-term investments, especially for funds with lower liquidity or short/inverse strategies. Kate then explores the Aberdeen Standard Physical Palladium ETF (PALL), some of the industrial uses of palladium, and macro conditions causing a recent run-up in price (including conflict between top palladium produce Russia and Ukraine), before breaking down the chart. Finally, Kate examines a potential technical entry price based on the chart formation.

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The ETF discussed in this video is for educational purposes only and should not be considered a recommendation.

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Kate Stalter is a Series 65-licensed asset manager, with more than two decades of experience in various areas of financial services. As an investment advisor and financial planner, Kate personally manages client portfolios, with a focus on successful retirement, including asset allocation, income generation and tax strategies.